NY Fed line of credit could facilitate ILFC sale

"ILFC, which last month admitted that it needed "additional support" owing to its lack of access to financing as a unit of American International Group, reportedly is close to reaching agreement with the Federal Reserve Bank of New York to obtain a $5 billion line of credit that will help facilitate its sale. The NY Fed and the US government have spent more than $180 billion since last fall to bail out AIG and keep the sprawling company solvent. ILFC is believed to be one of AIG's most valuable and profitable assets and has been attempting to find buyers to remove it from AIG's umbrella (ATWOnline, Nov. 25, 2008). In a filing last month with the Securities and Exchange Commission, ILFC said its viability was compromised by AIG's downgraded credit status (ATWOnline, March 26). "We have generally financed our aircraft purchases through available cash balances, internally generated funds and debt financings," the lessor explained in the filing. "A combination of the challenges facing our parent. . . the downgrades in our credit ratings or outlooks by the rating agencies, and the turmoil in the credit markets have eliminated our ability to issue commercial paper and public unsecured debt." It said it needed additional funding going forward "to meet our future liquidity needs." Next.